Ill Omens for Senate Climate Legislation

WASHINGTON - Delivering his State
of the Union address before both houses of Congress and a global
audience on Jan. 27, U.S. President Barack Obama asked for passage of
"a comprehensive energy and climate bill with incentives that will
finally make clean energy the profitable kind of energy in America."

The progress toward
such a bill has all but frozen during this exceptionally cold
Washington winter, however, and a slew of energy-related announcements
since the president's address have done little to thaw that impasse.

To
bring sceptical Republicans and conservative Democrats on board with
climate bill proposals in the U.S. Senate, the president prefaced his
appeal last week with several concessions that have been less than
welcome to most advocates of climate change action.

Emphasising
the need for the U.S. to create more "clean energy jobs," Obama said,
"We need more production, more efficiency, more incentives. And that
means building a new generation of safe, clean nuclear power plants in
this country. It means making tough decisions about opening new
offshore areas for oil and gas development. It means continued
investment in advanced biofuels and clean coal technologies."

Hope for a Congressional bill to cap greenhouse gas emissions is nonetheless continuing to fade.

When
the U.S. officially committed, a day after the State of the Union, to
meeting the emissions cuts Obama proposed in Copenhagen - four percent
below 1990 levels by 2020 - there was one major caveat: any commitment
was contingent on the outcome of climate legislation in Congress.

The
U.S. House of Representatives passed a bill last June based around a
cap and trade system that would limit and set a price on greenhouse gas
emissions in the country. Now, what hope remained for a Senate bill,
which would be combined with the House's to create a climate law,
appears to be all but gone.

Speaking at a town hall meeting in
New Hampshire Tuesday, Obama recognised the unlikelihood of a cap and
trade bill making its way across his desk and, while still emphasising
the need for "incentivising clean energy so that it's the cheaper, more
effective kind of energy," he admitted it might be necessary to go
ahead with an energy and green jobs bill that does not include a cap on
emissions.

"The only thing I would say about it is this: We may
be able to separate these things out. And it's conceivable that that's
where the Senate ends up," Obama said.

Wednesday morning, the
president reiterated his support for legislation that would put a price
on carbon, but the momentum on Capitol Hill currently seems to be
headed the other way. An increasing number of senators, both
Republicans and Democrats among them, have favored a so-called
energy-only bill that would fail to cap carbon and set a price for
emitting it.

This bill would establish a standard requiring
utilities to derive 15 percent of their power from renewable sources by
2021, but it would also include such provisions as the expansion of
offshore drilling.

Sen. Lindsey Graham, an influential
Republican who is working with the Democratic Sen. John Kerry and
Independent Sen. Joe Lieberman on a tri-partisan climate bill proposal,
said Wednesday he would not support this partial approach to addressing
climate issues on Capitol Hill.

"If the approach is to try to
pass some half-assed energy bill and say that moves the ball down the
road, forget it with me," Graham told renewable energy business leaders
here Wednesday.

Mixed signals from the White House

Graham
and the other members of his triumvirate, however, do support expanded
offshore drilling, as well as other initiatives, such as building new
nuclear power plants, normally inimical to the desires of those
concerned with mitigating the effects of climate change.

But
despite climate activists' protests, those provisions have gotten a
boost since the president included them in his address last week.
Nuclear in particular has gotten a vote of confidence that it has not
seen in over a decade. The White House's requested budget for the 2011
fiscal year, released Monday, would triple the amount of loan
guarantees available to utilities wanting to build new nuclear
reactors, from the 18.5 billion dollars already authorised by Congress
to 54.5 billion dollars.

Sierra Club Executive Director Carl
Pope, who was otherwise mostly pleased with the proposed budget,
disagreed. "We believe that this money could be far better spent on
cleaner, cheaper, safer, and faster ways to reduce emissions," he said.

Wednesday,
Obama also announced a task force charged with figuring out how to
accelerate the development and deployment of carbon capture and
sequestration technology, by which the carbon dioxide emissions from
burning coal for energy are stored underground rather than going into
the atmosphere.

But the idea that burning coal - which releases
more carbon dioxide emissions per unit of energy produced than any
other fossil fuel - can be made cleaner is still controversial.

Obama,
however, said Wednesday he feels that "in order for us to move forward
with a robust energy policy, we've got to have not an either/or
philosophy but a both/and philosophy."

And indeed, there has been movement on both the "traditional" and cleaner sides of energy policy.

His
budget proposal also includes three to five billion dollars in loan
guarantees for energy efficiency and renewable energy projects, for
instance, as well as other funding for renewables and green jobs across
several departments, and requests that tax loopholes currently
available to large oil, natural gas, and coal companies be shut. The
proposal to eliminate these subsidies, however, is not expected to be
approved by Congress.

Possibly most significant for gauging the
White House's level of confidence in seeing a comprehensive climate
bill come across the president's desk this year is the fact that
revenue from a cap and trade programme was not included in the proposed
budget.

The FY2010 budget had hard numbers reflecting what such
a programme would bring in over the next decade, while Monday's budget
request includes only an exhortation for "a comprehensive market-based
policy that will reduce greenhouse gas emissions in the range of 17
percent in 2020 and more than 80 percent by 2050."

The other nuclear option

Still,
all hope is not lost for climate advocates in the U.S. - and those
overseas looking for the world's second largest emitter of greenhouse
gases to take a lead.

The budget also allocates 43 million
dollars to the U.S. Environmental Protection Agency to begin to
regulate the emissions of greenhouse gases in the event Congress fails
to pass a bill that does so. The EPA found in December that greenhouse
gases posed a public danger to U.S. citizens, and therefore had to be
regulated, though it preferred that Congress take the initiative in
doing so.

This backup option is not foolproof, however. Congress
would also prefer to take the initiative in regulating emissions, and
some - mostly notably Alaska Republican Sen. Lisa Murkowski - have
begun attempts to strip the EPA of its ability, under the Clean Air
Act, to regulate substances like greenhouse gases that endanger the
public.

Tuesday, three representatives - two Democrats and one Republican - began a similar initiative in the House.